Since it its passage in 2010, the Affordable Care Act has been debated ad nauseam.  Yet, when over 800 employers were asked how familiar they were with the law, over a third stated that they didn't know much about it or its requirements. When asked whether they had prepared for the ACA, about a quarter of employers said no. The poll was conducted in March by Nielson Research. Its results are discussed in a news release issued by the Travelers Insurance Company.

According to Travelers, the poll results suggest that a significant number of employers will face penalties for non-compliance of the ACA. These employers may also be subject to lawsuits, regulatory actions, and damage to their reputation. Don't be one of them!

The poll revealed something interesting. Employers that were well-acquainted with the ACA were much more concerned  about employee lawsuits than their less-informed counterparts. Ignorance about the ACA may be bliss. However,  employers will not remain blissful if they are hit with a fine or a penalty for violating the ACA.

Employers that fail to comply with the ACA may also be a target of lawsuits by disgruntled employees. Suppose an employee fails to enroll in your company-sponsored health plan. The employee is subsequently diagnosed with a serious illness and incurs large out-of-pocket expenses. The employee then sues you for negligence, claiming that he didn't sign up for benefits because you failed to properly inform him of his healthcare options.

If you are a non-compliant employer, you may be also be subject to whistleblower lawsuits. Travelers notes that almost half of the poll respondents were unfamiliar with employee whistleblower protections. One of these is the Whistleblower Protection Program (WPP). Through this program, the Occupational Safety and Health Administration (OSHA) enforces the whistleblower provisions of more than twenty statutes that protect employees.  These statutes allow employees to notify the government if their employer has violated various laws. For instance, your employees can report you for violating workplace safety, environmental or health insurance reform laws. For information about whistleblower suits related to the ACA, check out this fact sheet.

How can employers protect themselves against ACA-related lawsuits?  First, knowledge is king. If you don't understand the ACA and the obligations it imposes on you as an employer, get help from a professional. Your insurance agent or broker is a good place to start. Secondly, learn about the liability risks the ACA presnts. Your insurance agent or attorney may be able to explain these risks. Lastly, find out whether your existing insurance policies will protect you against ACA-related claims. Your insurance agent or attorney may be able help you evaluate your existing policies and decide whether you need additional coverages. Some ACA-related suits may be covered by employee benefits liability insurance. Other suits may be covered by directors and officers liability or employment practices liability insurance.

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